Summary of Key Points from the Conference Call Records Industry Overview - The express delivery industry has maintained nearly 20% growth from January to July 2025, driven primarily by live e-commerce, interest e-commerce, and instant retail, indicating significant internal growth potential [1][2] - The revenue distribution in the franchise express network is complex, involving collection commissions, transfer fees, and waybill fees, which directly affects operational efficiency and market competitiveness [1][2][5] Core Insights and Arguments - ZTO Express has implemented a shoulder-sharing mechanism and end-point delivery chain to protect the rights of couriers, enhancing its soft power and culture while leading in automation and vehicle ratios, thus maintaining cost advantages [1][7] - Logistics unmanned vehicles are seen as key to transforming the express delivery business model and operational costs, with 2025 being regarded as the year of application, although the distribution of benefits remains a critical challenge [1][10] - Price increases in the express delivery industry aim to address arbitrage issues, promote high-quality development, and achieve high profitability for express companies [1][11] Company Performance - In the first half of the year, SF Express experienced the fastest business volume growth at 32%, followed by YTO Express at 22%. However, excluding non-recurring net profits, all companies except SF Express saw declines, with YTO experiencing the smallest drop [1][16][17] - SF Express reported a 3.5% growth in non-recurring net profit in Q2, with international business losses narrowing and free cash flow improving, indicating medium to long-term investment value [1][18][20][22] Strategic Developments - YTO Express began building its airline in 2015 to enhance product timeliness and promote product upgrades and international business development, but this early investment has affected its scale efficiency [1][6] - The express delivery industry is transitioning towards a layered service model, where leading companies will shift from a focus on volume and profit to promoting high-end product structures [1][14] Future Trends and Considerations - The express delivery industry is expected to see a shift towards differentiated service layers, with leading companies targeting high-value customers while less competitive firms handle lower-value business [1][13][14] - Attention should be paid to Shentong and YTO in the short term, with Shentong expected to double its profit after price increases, while YTO is narrowing the gap with ZTO in terms of market share growth and net profit [1][15] Additional Important Insights - The price war in the express delivery industry has a policy bottom line, with significant price increases implemented in 2021 leading to improved profitability across companies [1][9][12] - SF Express's free cash flow increased by 6.1% year-on-year, and the company has initiated a mid-term dividend policy with a payout ratio of 40%, reflecting a commitment to returning value to shareholders [1][21]